TMI Tax Updates - e-Newsletter
December 10, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Central Excise
Indian Laws
Highlights / Catch Notes
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GST:
Refund of GST paid on notice pay received from the erstwhile employees - The contention raised by the learned counsel for the respondent Department that the petitioner has an effective alternative remedy before the GST Appellate Tribunal does not appeal to this Court for the simple reason that the GST Appellate Tribunal is yet to be constituted. - Refund application restored back - HC
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GST:
Territorial Jurisdiction - Investigation Officers at Coimbatore or Madurai - The writ appeal stands allowed with a direction to the respondents to depute an officer in Chennai to investigate into the affairs of the appellant and issue summons as to whether there is any evasion of tax under the provisions of respective GST enactments, 2017 - HC
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Income Tax:
Reopening of assessment u/s 147 - non-issue of a notice u/s 143(2) - The Circular reinforces the position that it is sine qua non for the Assessing Officer to assume jurisdiction prior to taking any steps in the matter of assessment, including reference of the matter to the TPO. The jurisdiction assumed by an officer in terms of Section 120 of the Act is activated by issuance of notice under Section 143(2), and as a consequence, failure to issue the statutory notice will lead to the inevitable result of the Officer not having assumed jurisdiction, for all practical purposes. - HC
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Income Tax:
Exemption u/s 10(22) denied - Addition u/s 68 - the Stand taken by the assessee that contributions were received only from the students has been rightly rejected by the Assessing Officer. Further, the cash balance of Rs.1.30 Crores at the peak with petty cash being drawn on daily basis fortifies the view taken by the Assessing Officer that money was being utilized for some other purpose. - HC
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Income Tax:
Unexplained money - amount received from his father-in-law - If the CIT(A) was not satisfied with the source, he could have enquired into the matter by issuing notice to the legal representatives of the assessee's father-in-law. Admittedly, no such enquiry was conducted. Therefore, additions could not have been sustained by the CIT(A) based on surmises and incorrect application of law- HC
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Income Tax:
TDS u/s 40 (a)(ia) - TDS on interest to outgoing partner of the partnership firm - As per provisions of section 40(a)(ia) even if assessee debited expenditure, but same needs to be allowed as and when the assessee deducts TDS on said expenditure. In this case, the assessee has deducted TDS on impugned expenditure for the assessment year 2014-15, which has to be allowed irrespective of method of accounting followed by the assessee. - AT
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Income Tax:
Exemption u/s 11 - Admittedly, the claim of exemption was made in the revised return filed within the statutory time limit but was treated as defective only on flimsy ground that once the original return is e-filed, the revised return cannot be filed manually during assessment proceedings. Not claiming exemption in the original return, though otherwise legally admissible on facts cannot be fatal when the assessee did claim exemption in the revised return - AT
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Income Tax:
Denial of foreign tax credit u/s 91 - delay in filing Form no.67 - Mere delay in filing Form No. 67 as per the provisions of Rule 128(9), as they stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India. - AT
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Income Tax:
Rectification u/s 154 - claim the allowance of 50% of the expenses against the commission income - Since the assessee has himself not pressed the issue as to allowability of 50% of the expenses against the income earned in the original appeal filed before the Tribunal vide appeal for for A.Y. 2004-05 to A.Y 2010-11 decided against which miscellaneous application has also been dismissed, he is not entitled to re-agitate the same issue before the Tribuanl under the garb of filing application under section 154 of the Act before the AO and then filling the appeal before the Ld. CIT(A) and the Tribunal. - AT
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Income Tax:
Ex parte order of CIT-A - assessee had bonafide reasons for non-appearance on the scheduled date of hearing - matter restored back - In case, however, the assessee does not fully co-operate in expeditious disposal of remanded proceedings, learned CIT(A) will be at liberty to take such action, apart from disposal of appeal based on material on record, as he deems fit and proper and judicious. - AT
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Income Tax:
Ex parte orders passed - non-compliance by the assessee to various notices issued to it by the lower authorities - Looking to the non-cooperative attitude of the assessee right from the very beginning i.e. the assessment proceedings, we are not inclined to show any liberty to such an assessee who does not appear to be interested to fight for her own cause. - AT
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Income Tax:
TP Adjustment - rejecting the Internal Transactional Net Margin Method (TNMM) as Most Appropriate Method (MAM) - effectively all the 12 comparables chosen by the assessee, on without prejudice basis, for applying External TNMM gets approved. - there is no scope for making any adjustment to arm’s length price even if External TNMM is adopted in the instant case. - AT
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Income Tax:
Exemption u/s 11 - Accumulation of income - The money referred in Clause (b) (ii) is one accumulated or set apart. Meaning thereby that even if 85% of the income referred in clause (a) or sub-clause (b) of sub section 1 of Section 11 read with the explanation 2 to that sub section (1) is applied to charitable or religious purposes then to claim exemption on the whole of the income, the accumulated or set apart income has to be deposited or invested in the investments identified in sub section (5) of section 11. - AT
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Customs:
SION - starch slurry - maize - manufacturing of liquid glucose concentrate (food grade) - Recovery of customs duty foregone on the inputs allowed to be imported under 7 DFIA licences - In the present case, the immediate parent material was starch slurry i.e. starch and not maize and therefore case of the department that SION E76 was the correct norm cannot be sustained. Since the immediate parent material for manufacturing the exported goods was starch falling under SION E22 , it is clear that the Starch was the correctly applicable SION. - AT
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Indian Laws:
Consumer Protection - Seeking hand over possession of the residential duplex flat to the Complainant - Entering into agreement for a duplex flat is only a sequence for realizing the invested amount with interest. Claim made by the Complainant is only for furtherance of gain for the original investment made. The Complainant being an investor is not a “Consumer” under the provisions of Consumer Protection Act, 1986. - Commission
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IBC:
Validity of order of NCLT giving direction to pay the dues to the ‘Corporate Debtor’ - In the absence of any concrete evidence on record that the amounts were indeed transferred to the Sister Concern, nor any acceptance letter by the Corporate Debtor, agreeing to such transfer, and also having regard to the fact that there is no denial by the Appellant herein with respect to the actual transactions, having been executed, we do not see any illegality or infirmity in the Impugned Order. - AT
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Central Excise:
Levy of penalty Rule 26 of Central Excise Act, 2002 - charge of abatement in the offence of fraudulent availment of cenvat credit - All the appellant having direct and active role in entire modus operandi of wrong availment of cenvat credit by the manufacturer - Therefore, the penalties imposed on the appellant is correct hence, the same is upheld. - AT
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Central Excise:
Levy of interest and penalty - Reversal of CENVAT Credit (without utilization) on being pointed out, before issuance of SCN - period from January, 2005 to March, 2007 - the interest is chargeable in event of either wrongly availed credit or wrongly utilized. Therefore, even though the credit was not utilized but since the credit was wrongly availed the interest is unavoidably chargeable. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2022 (12) TMI 411
Refund of GST paid on notice pay received from the erstwhile employees - non-constitution of GST Appellate Tribunal - It is the case of the petitioner that since the GST Appellate Tribunal has not been constituted, the petitioner has no other remedy other than to approach this Court under Article 226 of the Constitution of India - HELD THAT:- The petitioner is entitled to succeed. The terms of Ext.P8 Circular specifically deal with the question arising for consideration in this case. The relevant portion of the Circular, which has been extracted hereinabove, clarifies that the amount of money received by the petitioner as notice pay from erstwhile employees is not a taxable transaction for the purposes of the GST laws. As rightly contended by the learned senior counsel, the decisions of the Supreme Court in NAVNIT LAL C. JAVERI VERSUS KK. SEN, APPELLATE ASSISTANT COMMISSIONER OF INCOME-TAX, BOMBAY [ 1964 (10) TMI 16 - SUPREME COURT] which was applied and followed in KP VARGHESE VERSUS INCOME-TAX OFFICER, ERNAKULAM, AND ANOTHER [ 1981 (9) TMI 1 - SUPREME COURT] are binding precedents for the proposition that Circulars in the nature of Ext.P8 are binding on the Department and no officer can take a view contrary to stipulations contained in such Circulars. The fact that the Circular was issued only after the issuance of Ext.P1 order of the first appellate authority is no reason to hold that the petitioner is not entitled to the benefits of the Circular. The contention raised by the learned counsel for the respondent Department that the petitioner has an effective alternative remedy before the GST Appellate Tribunal does not appeal to this Court for the simple reason that the GST Appellate Tribunal is yet to be constituted. The fact that the period of limitation will start to run only from the date of the constitution of the Appellate Tribunal is no solace to the petitioner. The petitioner is, therefore, entitled to exercise the jurisdiction of this Court under Article 226 of the Constitution of India to challenge the orders impugned in this writ petition. Petition allowed.
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2022 (12) TMI 410
Cancellation of registration of petitioner - appeal rejected on the ground that the counsel for the petitioner on three dates has not appeared and pressed the appeal and in view of Section 107(9) of the Act of 2017 only three adjournments can be granted and thereafter the First Appellate Authority proceeded to pass an ex parte order rejecting the application - HELD THAT:- This Court finds that by ex parte order the first appeal filed by the petitioner has been dismissed as he has failed to appear before the authority on 6.4.2021, 24.9.2021 and 2.11.2021. Taking a lenient view, this Court directs the Appellate Authority to reconsider the appeal of the petitioner on merits after hearing the counsel for the petitioner and decide the same within a period of one month from the date of production of certified copy of this order. This Court further directs that the petitioner's counsel shall remain present on the date fixed by the First Appellate Authority and shall argue the matter on merits. Petition disposed off.
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2022 (12) TMI 409
Jurisdiction of the respondent no. 3 to proceed under Section 74 of U.P. GST/CGST Act, 2017 on the basis of a survey/SIB survey - blocking ITC under Rule 86-A of U.P. GST/CGST Rules 2017 - confiscation of seized goods under Section 130 of the Act - HELD THAT:- The petitioner herein has come up against the show cause notice. All issues raised herein are still open to agitate before the Assessing Officer. We, therefore, do not find any good ground to entertain the writ petition. The present writ petition is being disposed of with the observation that all the issues raised by the petitioner herein, especially the issue with regard to the jurisdiction of the Assessing Officer to proceed under Section 74, in view of the order of the appellate authority dated 19.7.2022, shall be raised before the Assessing Officer in reply to the show cause notice, the subject matter of challenge herein. Application disposed off.
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2022 (12) TMI 408
Territorial Jurisdiction - investigation against the assessee at different locations - Seeking forbearance from proceeding with the investigation with regard to Goods and Services Tax under the provisions of Central Goods and Service Tax Act, 2017 - territorial nexus between the appellant and the respondent Officers at Coimbatore or Madurai - HELD THAT:- Though the officer from the Intelligence Department of Directorate General of Goods and Services Tax Intelligence is competent to investigate into the affairs of the appellant, the officer, who would be competent to investigate would be the officer, who is stationed in Chennai within whose jurisdiction the appellant is located. The writ appeal stands allowed with a direction to the respondents to depute an officer in Chennai to investigate into the affairs of the appellant and issue summons as to whether there is any evasion of tax under the provisions of respective GST enactments, 2017 - Appeal allowed.
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2022 (12) TMI 407
Direction for issuance of F-Forms to the petitioner for the year 2017-18 - Central Sales Tax Act, 1956 - HELD THAT:- The writ petition is disposed of with a direction that the respondents/revenue will issue F-Forms to the petitioner qua the year in issue i.e., 2017-2018, subject to the verification of entitlement on merits, without being burdened with the issue concerning limitation, which is in line with the direction issued in other cases, including the judgment of the coordinate bench in M/S SAMSUNG C T PVT. LTD. VERSUS THE COMMISSIONER, TRADE TAXES, ANR. [ 2019 (2) TMI 1772 - DELHI HIGH COURT ]. It is made clear that the direction issued hereinabove in paragraph 6 will remain suspended till the civil appeals pending in the Supreme Court, as noticed in the matter of Samsung C T Pvt. Ltd., are adjudicated. Appeal disposed off.
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2022 (12) TMI 406
Cancellation of registration granted to the petitioner - It is a specific case of the petitioner that no such notice was issued and the only notice issued to the petitioner was one regarding the suspension of his registration in Form REG-31 - HELD THAT:- The matter is remitted to the 1st respondent to complete the proceedings against the petitioner in accordance with law. As a consequence of this order, the registration of the petitioner which was canceled by Ext.P4 order will stand restored till a fresh decision is taken by the 1st respondent. This writ petition is allowed.
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Income Tax
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2022 (12) TMI 398
TDS u/s 40 (a)(ia) - additions made towards disallowance of interest paid on partners capital account - assessee is following mercantile system of accounting, income and expenditure pertains to relevant accounting period is required to be accounted whether or not such expenditure/income is received by the assessee - HELD THAT:- When it comes to deductibility of any expenditure, it is subject to provisions of section 40(a)(ia) of the Act and as per said provision, expenditure debited to profit and loss account cannot be allowed as deduction, in case the assessee has not deducted TDS on said expenditure. The provisio provided to section 40(a)(ia) further states that said expenditure can be allowed as deduction in the year in which the assessee has deducted TDS and remits to Government account. Assuming for a moment, the assessee has made a provision for interest payment to partner in the earlier assessment year 2013-14, but same cannot be allowed as deduction because of non-deduction of tax at source. Further, it is a tax neutral exercise, because if assessee provides interest in the last financial year, to that extent profits of the assessee would come down and at the same time for non-deduction of TDS if expenses is disallowed then profit would remain same. Therefore, for assessment year 2013-14 there is no net effect on the profit declared by the assessee. As per provisions of section 40(a)(ia) even if assessee debited expenditure, but same needs to be allowed as and when the assessee deducts TDS on said expenditure. In this case, the assessee has deducted TDS on impugned expenditure for the assessment year 2014-15, which has to be allowed irrespective of method of accounting followed by the assessee. AO as well as the CIT(A) are erred in disallowing interest paid to outgoing partner s account and thus, we direct the AO to delete additions made towards disallowance of interest paid on partners capital account. Appeal filed by the assessee is allowed.
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2022 (12) TMI 397
Exemption u/s 11 - assessee is a registered society u/s 12A since past more than 25 years - Charitable activity u/s 2(15) - HELD THAT:- As assessee has established that the income generated from this activity is not applied for any individual benefit or transfer to the benefit of any particular person, entity or group of persons but the application is for the benefit of public at large. This amply proves that the AO accepted the claim of the assessee that the assessee is a charitable society. It was in the backdrop of such a finding of the AO that the CIT(A) arrived at the conclusion that the income of the assessee has to be computed in accordance with the provisions of section 11 to 13 which would include accumulations as per section 11(1)(a) and section 11(2). He, then directed the Ld. AO to re-compute the income after giving benefit of section 11 along with all the consequential benefit. We do not find any infirmity in the order of the CIT(A) in giving the above direction to the Ld. AO. Hence these grounds of the Revenue are decided against it. Exemption was never claimed by the assessee in the original ITR and the revised ROI filed by the assessee was defective - In our opinion, this is not a valid reason to deny the benefit of exemption, once the Revenue accepts that the assessee is a charitable society whose activities are not in the nature of business and its income is applied for the benefit of public at large - Admittedly, the claim of exemption was made in the revised return filed within the statutory time limit but was treated as defective only on flimsy ground that once the original return is e-filed, the revised return cannot be filed manually during assessment proceedings. Not claiming exemption in the original return, though otherwise legally admissible on facts cannot be fatal when the assessee did claim exemption in the revised return which was duly considered for the purposes of making assessment. We, therefore do not find any substance in this grievance of the Revenue. Denial of depreciation - assessee s claim of depreciation tantamount to a double deduction since the assessee has already claimed deduction of its capital expenditure being a trust - HELD THAT:- CIT(A) has taken notice of subsection( 6) of section 11 inserted by the Finance Act, 2014 w.e.f. 1.4.2015 which has now put restriction on claim of depreciation. The amendment is only prospective applicable to AY 2015-16 and subsequent years and not to case of the assessee in which AY involved is 2012-13. We endorse the findings of the Ld. CIT(A) and hold that the grievance of the Revenue is not sustainable in so far as the present appeal of the Revenue is concerned, the amended law being inapplicable. Accordingly, we decide ground against the Revenue. Taxes paid and deposited which the AO disallowed observing that the taxes are eventually refundable or are not deductable as per provisions of the Act and the same cannot be considered as application of income for the purpose of deduction under section 11 - HELD THAT:- Before the Ld. CIT(A), the assessee relying on the decision of CIT vs. Janki Ammal Ayya Nadar Trust [ 1982 (8) TMI 4 - MADRAS HIGH COURT] submitted that tax paid out of current year s income is application for charitable purposes. The submission was acceptable to the Ld. CIT(A) who found support from the decision in DIT(E) vs. National Association of Software and service companies [ 2012 (5) TMI 204 - DELHI HIGH COURT] as well. We do not find any flaw in the direction of the CIT(A) to the Ld AO to allow the impugned amount as application of income by the assessee society. The ground, being bereft of any substance is rejected. Disallowance of expenditure of earmarked fund by the Ld. AO - HELD THAT:- The unused funds are shown as liability in the balance sheet and carried forward till they are used. The explanation was not acceptable to the Ld. AO. According to him, the application of earmarked fund cannot be considered as application for the current year whereas they are made out of funds received in the previous year. As per the matching concept, the expenses should have been booked in the previous year and cannot be claimed against the application of income in the current year. CIT(A) did not agree with the view of the Ld. AO. Accordingly to him, matching concept do not apply. From schedule 3 of the Annual Accounts for the period ended 31.03.2012 it is observed that during the year the assessee had received fund out of which the assessee utilised Rs. 6,50,00,000/- only which means that the impugned expenditure was incurred from the fund received during the year itself and not out of accumulated income of earlier years. Since the basis of disallowance itself does not subsist, we agree with the finding of the CIT(A) that the impugned disallowance is not sustainable and reject this ground of the Revenue as well. Appeal of the Revenue is dismissed.
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2022 (12) TMI 396
Set off loss against addition of undisclosed income - losses in share transaction in derivative segment and in cash delivery segment - CIT(A) upheld the addition to the extent of peak investment - CIT(A) held that such claim cannot be entertained at this stage - HELD THAT:- Though the Assessing Officer is not entitled to admit or entertain additional claim during the assessment proceedings, however the appellate authority has such jurisdiction to admit such additional claim as has been held by Hon'ble jurisdictional High Court in the case of CIT Vs. Mitesh Impex 2014 (4) TMI 484 - GUJARAT HIGH COURT Thus,admit the additional plea of set off of loss of current year against the income of assessee in the impugned year. So far as merit is concerned, the Hon'ble jurisdictional High Court in the case of Shilpa Dyeing Printing Mills (P.) Ltd. 2015 (7) TMI 691 - GUJARAT HIGH COURT held that once the loss is determined, the same should be set off against the income determined under any other head of income including undisclosed income. Similar views taken by Division Bench of Hon'ble Delhi Tribunal in the case of Rajendra Kumar Anand[ 2022 (5) TMI 1488 - ITAT DLEHI] wherein it was held that when Assessing Officer made addition of certain amount to income of assessee from undisclosed sources taxable under section 69 claim of set off loss is to be allowed. We direct the Assessing Officer to verify the facts and allow the set off loss suffered by assessee against addition of undisclosed income. Thus, the Ground raised by assessee is allowed in above terms.
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2022 (12) TMI 395
Denial of foreign tax credit u/s 91 - delay in filing Form no.67 - HELD THAT:- As in Anuj Bhagwati [ 2022 (9) TMI 1397 - ITAT MUMBAI] while deciding a similar issue held that section 90/91 of the Act has not been amended insofar as grant of foreign tax credit is concerned and Rules cannot override the Act and therefore filing of Form No. 67 is not mandatory but it is directory. Mere delay in filing Form No. 67 as per the provisions of Rule 128(9), as they stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India. Since in the present case, the claim of the assessee was denied on this technical aspect without going into the merits, therefore, we deem it appropriate to direct the jurisdictional AO to decide the claim of the foreign tax credit on merits, after accepting the Form No. 67 and other related documents filed by the assessee. Accordingly, grounds raised by the assessee are allowed for statistical purposes.
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2022 (12) TMI 394
Penalty u/s 271(1)(c) - expenditure which was claimed by the assessee as exceptional item in the profit loss a/c - HELD THAT:- The penalty imposed by the AO and confirmed by the CIT(A) is not correct as further reason that the assessee has disclosed all the facts in the tax return filed by the assessee and thus all the facts were available before AO and nothing was concealed. Even if, the assessee has made a claim which is not correct or not as per provisions of the Act or which the AO considered to be not correct even then the penalty cannot be levied as the full facts were before the AO in the return of income. The facts of the assessee finds that in the case of CIT vs Reliance Petro Products (P) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] has held that making of claim which is not sustainable in law and claim made in the return cannot be held to be furnishing of inaccurate particulars of income, merely because the assessee claimed deduction interest expenditure which is not been accepted by the revenue and penalty cannot be levied u/s 271(1)(c). On the same analogy, we find that the facts of assessee s case are quite similar. We, therefore, respectfully follow the same set aside the order of ld. CIT(A) - Appeal of the assessee is allowed.
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2022 (12) TMI 393
Rectification of mistake u/s 154 - Set-off of Losses of 10A Unit against the adjustment u/s 92CA and 40(a)(i) - As per AO set off of business loss being the loss of Chennai and Gurgoan undertakings, which was directed by CIT(A) to be set off, resulted into business loss being set off against the income from other sources and therefore, there is a mistake apparent from the record which needs to be rectified - Whether TP adjustment and the disallowance is question in altogether a separate adjustment/disallowance, which cannot be apportioned to a specific unit? - HELD THAT:- We have carefully considered the rival contentions and orders of the lower authorities. Fact shows that order giving effect to the order of the ld.CIT(A) was passed on 08.03.2012. According to that order, the loss incurred by the assessee was set off against other business income of ₹10,54,26,341/-. Therefore, in fact the business loss incurred by the assessee is set off against the business income of the assessee for the same year. The ld. CIT(A) has a followed three decisions of Hon ble jurisdiction of High Court in M/S. GALAXY SURFACTANTS LTD. [ 2012 (3) TMI 101 - BOMBAY HIGH COURT] , PATNI COMPUTER SYSTEMS LTD. [ 2013 (10) TMI 293 - BOMBAY HIGH COURT] and M/S. HINDUSTAN LEVER LTD. [ 2014 (4) TMI 1012 - BOMBAY HIGH COURT] DR could not show us any reason why the provisions of section 70 cannot be given effect to and how the order of the ld. CIT(A) is erroneous.In view of this, we confirm the order of the ld. CIT(A) and dismiss the appeal of the ld. Assessing Officer.
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2022 (12) TMI 392
Revision u/s 263 - additions made by the A.O. as commission received after allowing 50% expenses against the impugned commission - HELD THAT:- We are of the considered opinion that the assessee even during the second round of litigation has failed to substantiate its claim for allowing 95% of the expenses alleged to be incurred in earning the commission income received by the assessee from MSEDCL. The assessee neither before us, nor before the lower authorities have filed any additional evidences pertaining to its claim. We are of the considered view that the assessee has been given sufficient relief by the lower authorities in allowing 50% of the expenses claimed by the assessee in earning the impugned commission received from MSEDCL. Assessee has failed to prove that the said expenses were incurred wholly and exclusively for the purpose of earning the commission income. Sale of loan application form - As observed that the assessee has failed to furnish relevant details pertaining to the expenses claimed by the assessee for the above mentioned heads. Even during the second round of litigation, the assessee has not submitted any additional evidences pertaining to the said claim either before us or before the lower authorities. Interest on deposit on security from MSEDCL - AR submitted that similar receipts were derived by the assessee society in A.Y. 2008-09 and no addition was made for the same by the A.O. thereon. In view of this, we deem it fit and appropriate, as a last and final opportunity, to remand this issue to the file of the A.O. Miscellaneous Receipt, Recovery Expenses AND Interest on loan to staff interest on employees housing loan - AR submitted that similar receipts were derived by the assessee society in A.Y. 2008-09 and no addition was made for the same by the A.O. thereon. In view of this, we deem it fit and appropriate, as a last and final opportunity, to remand this issue to the file of the ld. A.O.
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2022 (12) TMI 391
Rectification u/s 154 - claim the allowance of 50% of the expenses against the commission income - HELD THAT:- When the grounds raised by the assessee in the present appeals that Ld. CIT(A) has erred in law and in facts in not allowing the expenses to the extent of 50% of the turnover has already been decided by the co-ordinate Bench of the Tribunal in the first round of litigation having not been pressed and miscellaneous application against the same has also been dismissed, the assessee is not entitled to re-agitate the matter again by filing rectification application under section 154 of the Act before the AO and then to again file the appeal against the order passed under section 154 before the Ld. CIT(A) and then before the Tribunal. AO in order passed under section 154 of the Act has duly complied with the order passed by the Tribunal to the extent of ground pressed by the assessee before the Tribunal as to restricting the rate of commission from 2% to 0.15% and has rightly dismissed the appeal under section 154 of the Act. Likewise the Ld. CIT(A) has also rightly dismissed the appeal by withholding the order passed by the AO. Since the assessee has himself not pressed the issue as to allowability of 50% of the expenses against the income earned in the original appeal filed before the Tribunal vide appeal for for A.Y. 2004-05 to A.Y 2010-11 decided against which miscellaneous application has also been dismissed, he is not entitled to re-agitate the same issue before the Tribuanl under the garb of filing application under section 154 of the Act before the AO and then filling the appeal before the Ld. CIT(A) and the Tribunal. Hence, we find no illegality or perversity in the impugned order passed by the Ld. CIT(A). Appeals filed by the assessee are hereby dismissed.
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2022 (12) TMI 390
Penalty levied u/s 271(1)(b) - non-compliance of the notice issued during the course of assessment proceedings - assessee contended that she is a salaried person and tax was deducted by the employer on the salary and therefore no return of income was filed by her in the regular course of income and due to change in her residential address, the notices issued could not be served upon her - HELD THAT:- We find that the AO has not mentioned any mode of the service of the notice dated 05.10.2019 u/s 142(1) of the Act before levy of the penalty. It is the responsibility of the Assessing Officer to confirm whether the notice was sent by notice server or through post or through e-mail and ensure whether same was served upon the assessee. No such fact has been brought on record by the AO - Further, we find that assessee has raised the change of address as one of the reasonable cause for non-compliance of notice u/s 142(1) of the Act. We find that in the instant case before us also ex-parte assessment has been completed against the assessee due to noncompliance of the notices and in which the assessee has substantiated change of the address as the main reason. Therefore, respectfully following the finding of case of Balram Kumar Mahendra [ 2012 (6) TMI 10 - ITAT DELHI] - we direct the Assessing Officer to delete the penalty levied u/s 271(1)(b) of the Act on the ground of being the reasonable cause for non-compliance of the notice u/s 142(1) of the Act. The grounds of the appeal of the assessee are accordingly allowed.
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2022 (12) TMI 389
Penalty u/s. 271(1)(b) - no legal service of the notices - assessee failed to explain the reason for non-compliance of notices issued under section 142(1) - HELD THAT:- As in the identical facts and circumstances the Delhi Tribunal in case of Smt. Rekha Rani [ 2015 (5) TMI 1100 - ITAT DELHI] has decided the issue in favour of assessee in part by observing that penalty for the first default of non-compliance of notice under section 143(2)/142(1) of the Act was sufficient enough. As the assessment has been framed under section 143(3) read with section 263 of the Act but the assessee did not furnish the details called for by the AO during the assessment proceedings. Therefore the reference made by the learned counsel for the assessee to the order of the Delhi tribunal in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust[ 2007 (8) TMI 386 - ITAT DELHI-G] cannot help the assessee. Appeal of the assessee is partly allowed.
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2022 (12) TMI 388
Unexplained cash credit u/s 68 - no documentary evidence was submitted by the assessee on ITBA portal to substantiate the claim with regard to filing the confirmation of the creditors and therefore the NFAC confirmed the order of the AO - HELD THAT:- As along with the written submission, the assessee had filed the confirmation of the 2 creditors and those confirmations are available - The only error was that it was filed in physical form and was not uploaded in the ITBA portal in soft form and the confirmation filed in physical form was not taken cognizance by the NFAC. Thus in the light of the availability of confirmation filed in physical form before the First Appellate Authority, the issue with regard to the aforesaid addition should be remanded to the AO for consideration afresh in the light of the confirmation already filed before the First Appellate Authority in physical form. Accordingly, this issue is set aside to the AO for confirmation denovo. Disallowance of bad debts written off - only reason assigned by both the Revenue authorities is that the assessee did not show as to what efforts the assessee made to recover the debts before writing off as bad debt - HELD THAT:- CBDT, on the basis of the aforesaid decision in the case of TRF Ltd [ 2010 (2) TMI 211 - SUPREME COURT ] issued Circular No.12/2016 dated 30.05.2016 as CBDT has clearly laid down that deduction should be allowed if a debt is written off as irrecoverable in the books of accounts of the assessee in the relevant previous year. In the light of the aforesaid decision of the Hon ble Supreme Court and CBDT Circular disallowance of deduction on account of bad debt written off is unsustainable and the same is directed to be allowed as deduction. Disallowance u/s 40(a)(ia) - sales promotion expenses - According to the AO, since the assessee did not deduct tax at source on the payments made to the hotels, the same claimed by the assessee cannot be allowed as deduction - HELD THAT:- It is pertinent to mention that the AO has not mentioned as to what is the nature of the aforesaid expenses and how it falls within the parameters of payments specified in section 40(a)(ia) - The First Appellate Authority also confirmed the order of the AO. In the light of the admitted position that the sum in question was the payment made to hotels for consumption of food, there is no requirement of complying with the requirements of section 40(a)(ia) of the Act, especially when the AO has not spelt out as to what is the nature of payment and as to how the payment falls within the ambit of payments referred to under section 40(a)(ia) of the Act. Hence, the addition made in this regard is directed to be deleted. Disallowance of expenses incurred by the assessee in procuring gift item to the customers - HELD THAT:- The only error was that it was filed in physical form and was not uploaded in the ITBA portal and the confirmation filed in physical form was not taken cognizance by the NFAC. In the light of the availability of bill in physical form before the First Appellate Authority, the issue with regard to the aforesaid addition should be remanded to the AO for consideration afresh in the light of the bill already filed before the First Appellate Authority in physical form. Accordingly, this issue is set aside to the AO. Disallowing commission paid - HELD THAT:- Thus payment in question has not been made to any related party. The law is well settled that in the matter of making business decisions, it is the prerogative of the businessman as to how he should conduct his business affairs. AO cannot sit in the armchair of the businessman and decide as to what should be paid as commission and to whom - disallowance of the commission expenses cannot be sustained and the same is directed to be deleted. Disallowance of commission expenses - HELD THAT:- AO cannot sit in judgment over business decisions taken by the assessee in the matter of payments of commission. For the reasons given while deciding the said ground, the disallowance made by the Revenue authorities cannot be sustained and the same is directed to be deleted.
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2022 (12) TMI 387
Validity of order of CIT(A) allowing the claim of assessee - Earlier the order of revision made by CIT u/s 263 was quashed by the ITAT - As per CIT transaction of sale of shares was not looked into by the A.O. by not applying his mind and thereby allowing carry forward loss - PCIT remanded the matter to the A.O. to verify the legal tenability of the Special Purpose Vehicle (SPV), the source of evidences of SPV to acquire the shares of ABMWL, the valuation of shares of ABNL IT ITES Limited and sale of shares - HELD THAT:- CIT(A) has allowed the claim of the assessee, pertaining to LTCL which is to be carry forward for set off in subsequent years. It is pertinent to point out that the ld. CIT(A) has passed the impugned order by placing reliance on the decision of the co-ordinate bench [ 2021 (5) TMI 791 - ITAT MUMBAI] which has quashed the order passed u/s. 263 on the ground that the assessment order passed u/s.143(3) was made after elaborate enquiry conducted by the A.O. based on which a possible view was taken, wherein the A.O. has stated that there was no misrepresentation of the facts by the assessee. Co-ordinate bench had held that the assessee has furnished all evidences and that section 263 proceeding was only based on borrowed satisfaction, i.e., audit objection and not on independent application of mind by the ld. Pr. CIT. The co-ordinate bench has also placed its reliance on the show cause notice issued by the ld. PCIT, wherein it has emphasized the fact that the language used by the Revenue audit party in it is audit objection was also the same as that which reflected in the show cause notice issued by ld. PCIT u/s.263 of the Act. In the present case, the ld. CIT(A) has held that on quashing of the order passed u/s.263 by the ld. PCIT, the assessment order u/s.143(3) r.w.s. 263 fails to survive on its own. On this ground, the ld. CIT(A) has allowed the impugned claim of the assessee. No infirmity in the order passed by the ld. CIT(A) in allowing the claim of the assessee as per the decision of the co-ordinate bench, quashing the order passed u/s. 263 and the subsequent assessment order u/s.143(3) r.w.s. 263 fails to have a legal sanctity - Appeal filed by the Revenue is dismissed.
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2022 (12) TMI 405
Reopening of assessment u/s 147 - non-issue of a notice u/s 143(2) - assumption of jurisdiction by an officer commences with, and is triggered by, the issuance of a notice under Section 143(2) and failure to do so, would compromise the proceedings fatally - HELD THAT:- There is complete uniformity in the conclusion of Courts on the issue as to whether non-issue of notice under Section 143(2) would vitiate the assessment, answering the issue in the affirmative. CBDT Instruction No.3 of 2003 elucidates upon and explains the provisions relating to Transfer Pricing, as contained in Sections 92 and 92F of the Act that had come into force, with effect from assessment year 2002-03 onwards. The Circular reinforces the position that it is sine qua non for the Assessing Officer to assume jurisdiction prior to taking any steps in the matter of assessment, including reference of the matter to the TPO. The jurisdiction assumed by an officer in terms of Section 120 of the Act is activated by issuance of notice under Section 143(2), and as a consequence, failure to issue the statutory notice will lead to the inevitable result of the Officer not having assumed jurisdiction, for all practical purposes. Period when the matter was pending before the Assessing Officer for compliance of the procedure set out should stand excluded in computing the period of 6 months required to issue notice under Section 143(2) - As the statutory period of six months cannot be altered except in the situations contemplated under Explanation to Section 153. The Explanation takes note of events that might intervene in the course of assessment proceedings, and excluded the time taken for those events to run their course, in computation of limitation. These are the only situations where statutory limitation under Section 153 may be expanded. On 10.01.2020, reasons had been supplied and on 04.03.2020, the petitioner filed its objections. These objections have been disposed only on 23.07.2021, after a period of one year and four months. There was nothing that prevented the assessing officer to have called for objections, assigning a time limit to the assessee to file the same, and disposed the objections expeditiously. The procedure set out in the case of GKN Drive shafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] nowhere envisages modification/expansion of the statutory limitations under the Act. Thus impugned notice under Section 148 and reference to TPO stand vitiated by non-issue of notice under Section 143(2) of the Act and the same are quashed. WP allowed.
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2022 (12) TMI 404
Validity of reopening of assessment - reopening as initiated beyond 4 years - Reasons to believe - HELD THAT:- It is settled that if notice under Section 148 of IT Act is to be issued after expiry of four years or before expiry of six years, the assessee should have failed to disclose the material facts . ITAT on consideration of the material on record has held that AO has not even stated or alleged that there was failure on the part of assessee to disclose fully and truly all the material facts necessary for the said assessment years. Nothing contrary to the findings of the ITAT is demonstrated or urged by the Revenue. In view of the settled position of law and the AO not stating that there was failure on the part of the assessee to disclose material facts, no exception can be taken to the order passed by the ITAT. Resultantly, these appeals must fail.
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2022 (12) TMI 386
Deduction u/s 54 - assessees could not furnish proper materials and could not make proper representation before ld. PCIT - HELD THAT:- Since the issues contested in these appeals relate to factual aspects and since the ld. AR submits that the assessees would be in a position to place all availabile records to prove their claim for deduction u/s 54 of the Act before Ld PCIT, in the interest of natural justice, we are of the view that these assessees may be provided with one more opportunity to present their case before ld. PCIT. Accordingly we set aside the orders passed by ld. PCIT in the hands of these assessees and restore all the issues to his file for examining them afresh. We also direct the assessees to furnish all information and explanations relating to the issues examined by ld. PCIT. Appeals filed by the assessees are treated as allowed for statistical purposes.
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2022 (12) TMI 403
Upfront premium amortization - land has been given on long lease/license for 30 years - Entitlement to amortize and offer 1/30th of the amount received as income every year - Whether consideration amount received in respect of an immovable property, either while conveying property or granting long license/lease shall be a capital receipt? - whether tribunal is justified in holding that the entire upfront premium constituted the income for the current year? - HELD THAT:- The issue involved in Sindhurani Chaudharani [ 1957 (4) TMI 3 - SUPREME COURT] is payment of 'Salami' and in this case it is upfront premium which non refundable. Therefore the matter requires reconsideration in the hands of the Assessing Officer referring to relevant facts and law. According to Shri.A.Shankar, if the accounting is as per AS-19 and even as per general principles of accounting, the upfront premium can be amortized on the principles of matching concept because the assessee has to provide various services. We have also noticed that Comptroller And Auditor General in his report has held that premium can be amortized. In our considered opinion, the matter requires reconsideration in the hands of the Assessing Officer. Hence, matter is remitted to the file of the Assessing Officer for fresh consideration in accordance with law after providing an opportunity of hearing to the assessee.
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2022 (12) TMI 385
Penalty u/s 271(1)(b) - defaults committed by the assessee in not causing appearing before the AO, during the course of assessment proceedings - HELD THAT:- No penalty is prescribed for non-appearance under section 271(1)(b) of the Act. Further, we also observe that in respect of the said notices issued by the AO, there is no mention in the penalty order of the date on which the notices were served upon the assessee and also the date on which the hearing was fixed. We observe that in the notice dated 03-07-2070, the hearing was fixed for 07-07-2017, thus giving only four days time for the assessee to cause appearance. Again in respect of notice dated 17-11-2017, the hearing was fixed for 22-11-2017, which again gives a very limited time for the assessee to cause appearance. Again, in respect of notice dated 12-12-2017, the hearing was fixed for 15- 12-2017, which again displays lack of time and adequate opportunity being provided to the assessee to cause appearance. We also observe that the assessee submitted before Ld. CIT(Appeals) that during the period he had shifted to Diu and therefore there is no mention in the penalty order, whether the notices were served upon the assessee. Therefore we are of the considered view that adequate opportunity of causing appearance was not granted to the assessee to cause appearance. Further, there is no mention in the order levying penalty under section 271(1)(b) of the Act, whether the notice was served of the assessee, coupled with the fact that only 3 to 4 days time was given to the assessee to cause appearance. Therefore, in the instant set of facts, we are of the view that this is not a fit case for levying penalty under section 271(1)(b) - Appeal of the assessee is allowed.
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2022 (12) TMI 384
Revision u/s. 263 - Bogus LTCG - as per CIT, AO failed to examine the correctness and genuineness of claim of long term capital gain(LTCG) u/s. 10(38) from sale of equity shares of a penny stock companies - HELD THAT:- In the impugned order ld. PCIT referred to the information from Directorate of Income Tax (Investigation), Kolkata, which had unearthed a large economic scam of tax evasion in July 2013 conducting search and seizure operations - share brokers and entry operators were involved in manipulation of market price of such penny stock. In the case of Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] under similar set of facts considering report of Directorate of Income Tax (Investigation), Kolkata and also poor financials of the penny stock companies but having sharp, drastic and abnormal increase in share price, held such long term capital gain from sale of such shares as bogus and confirmed the addition made by the ld. AO u/s. 68 of the Act and also confirmed the order passed u/s. 263 of the Act, thereby treating the assessment order as erroneous and so far as prejudicial to the interest of the revenue. Assessee having failed to controvert this finding by placing any other binding precedence of Hon ble Supreme Court in its favour we fail to find any infirmity in the finding of the ld. PCIT holding the assessment order u/s. 143(3) of the Act dt. 25-05-2017 as erroneous and so far as prejudicial to the interest of the revenue. Therefore, we confirm the finding of the ld.PCIT given in the impugned order. Appeal of the assessee is dismissed.
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2022 (12) TMI 402
Reopening of assessment u/s 147 or assessment u/s 153C - HELD THAT:- Undisputed facts of the case are, based on the agreement found during the search in the premises of M/s Davanam Jewellers Pvt. Ltd., the assessment was reopened for A.Y.2006-07. The assessment order does not indicate the procedure followed in re-opening the assessment. In addition protective assessment for A.Y.2007-08 has also been completed. As perused the agreement. Shri Chandrashekar is right in his submission that though the agreement is undated, the stamp paper bears the date of purchase as October 9th, 2009. The details of the payments are shown. In agreement, it is stated that the possession of the land shall be handed over after execution of the sale deed. In the facts of this case, in the absence of details in the assessment order with regard to the procedure followed and want of reasons whether assessment could be done under Section 147 or 153C which is a question of law, in our considered opinion, same requires to be answered by the ITAT. As pointed out by Sri Aravind that the question with regard to conclusion of assessment in similar case is pending consideration which has been heard and reserved for orders by the Apex Court. Thus the matter requires consideration in the hands of the ITAT. Accordingly, this matter is remitted on the file of the ITAT for fresh consideration in accordance with law.
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2022 (12) TMI 401
Exemption u/s 10(22) denied - objects of the Trust include commercial activity - appellant's Trust was registered with the primary object to impart education - AO did not allow exemption on the ground that that the assessee-Trust was not solely for the educational purposes, but the trust was making profits - as per AO Trust Deed provided for payment of Honorarium to the Trustees prohibited u/s 13(2), Trust collects abnormally high fees, for acquiring luxury vehicles, using the Trust funds for activities other than education and unexplained cash credit - HELD THAT:- AO has not accepted the explanation on the ground that only upon the Department raising a query, the assessee had shifted the figures of Building and Development Fund to Income and Expenditure Account, as an after thought. The assessee was called upon to produce the details of the persons, who had contributed for Building and Development Fund. Assessee replied stating that the records were misplaced and an FIR dated 08.03.2001 was lodged. The Assessing Officer has also noticed that though the assessee had claimed that an FIR was lodged on 08.03.2001, revised Balance Sheet, Income and Expenditure Account were drawn subsequently and filed along with an Audit Certificate, which was not possible without the Books of Accounts. In such circumstances, the Assessing Officer has treated the sum as unexplained Cash credit under Section 68 of the IT Act. Thus, the Stand taken by the assessee that contributions were received only from the students has been rightly rejected by the Assessing Officer. Further, the cash balance of Rs.1.30 Crores at the peak with petty cash being drawn on daily basis fortifies the view taken by the Assessing Officer that money was being utilized for some other purpose. No exception can be taken to the view taken by the Assessing Officer and the ITAT. Decided against the assessee.
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2022 (12) TMI 383
Revision u/s 263 by CIT - cash paid / deposited unexplained - assessee along with two co-owners had purchased immovable property AND while making this payment, the assessee paid an amount partly in cash and paid the balance amount through banking channels - observation of the Ld.Pr.CIT that while making payment through banking channels, the assessee made deposit in cash in Corporation Bank to obtain Demand Draft in favour of the seller - HELD THAT:- Contention of the assessee is that the cash paid / deposited was out of the balance available in her books, but she had not submitted any evidence to substantiate her claim and the AO has not verified the above details, therefore the Ld.Pr.CIT set aside the orders passed by the AO as deemed to be erroneous and prejudicial to the interest of the revenue. The contention of the assessee is that the AO has examined all the details filed by the assessee. Upon perusal of the assessment order, the AO has not mentioned anything about the verification of cash deposits / cash payment made by the assessee to the seller. In the absence of such enquiry, we are of the view that the order passed by the Ld.AO is prejudicial to the interest of the revenue. Therefore, we do not find any infirmity in the order passed by the Ld.Pr.CIT to examine the cash payments / deposits made by the assessee in order to purchase the immovable property. Hence, the grounds raised by the assessee are dismissed.
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2022 (12) TMI 400
Stay of demand - AO directing the appellant to deposit 20% of the tax as determined in the order of assessment - HELD THAT:- Admittedly, the assessments are high pitched assessments and when such high pitched assessments are appealed against and an order of stay is sought for either before the assessing officer by filing an application under Section 220(6) of the Income Tax Act, orders are passed by the assessing officer either keeping the notice of recovery in abeyance and not treating the assessee as an assessee in default till the appeal is disposed of. There are yet another set of cases where the assessing officer for reasons to be recorded imposes certain conditions as a condition for grant of stay. The appellant s case falls under the second category where the assessing officer has directed 20% of the demand to be paid by the assessee for being entitled to grant of stay. It is an undisputed fact that as against the impugned assessment order, appeal has been filed before the Commissioner of Income Tax (Appeals), second respondent on 25th January, 2018. It is not clear as to why the appeal is pending before the Commissioner (Appeals) for more than two years. The appeals are allowed and the order passed in the writ petitions is set aside with a direction to keep the recovery notices issued by the assessing officer kept in abeyance and direct the Commissioner of Income Tax (Appeals), the appellate authority, to disposed of the appeals on merits and in accordance with law after affording an opportunity of personal hearing to the authorised representative of the assessee as expeditiously as possible preferably within a period of 45 days from the date of receipt of the server copy of this judgment and order.
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2022 (12) TMI 399
Unexplained money - Assessee had deposited the amount in his bank after receiving the same from his father-in-law - lower authorities were in error in confirming the assessment on the ground that the WILL was not properly notarized or registered and on the further ground that creditworthiness of the father-in-law is not established in view of undisputed fact that there was no cash credits - HELD THAT:- It is settled that tax authorities cannot record any findings with regard to validity of the Will. They may look into any Will for satisfying themselves with regard any transaction. In view of the authority in Daulat ram Rawatmull and the fact that another sum of Rs.25 Lakhs has been paid to assessee's co-brother under the very same Will and there has been no enquiry in that regard, we are of the view that the findings recorded by the CIT(A) by making critical analysis with regard to validity of the Will are not sustainable. ITAT has upheld the order of CIT(A). Therefore, the said order is also unsustainable. If the CIT(A) was not satisfied with the source, he could have enquired into the matter by issuing notice to the legal representatives of the assessee's father-in-law. Admittedly, no such enquiry was conducted. Therefore, additions could not have been sustained by the CIT(A) based on surmises and incorrect application of law - The question of law raised in this appeal is answered in favour of the Assessee.
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2022 (12) TMI 382
Nature of expenditure - expenditures incurred towards change of flooring and bathroom fittings without changing the structure of the building - revenue or capital expenditure - HELD THAT:- Admittedly, fact is that assessee is in the business of hotel/resort wherein the up-keep or maintenance of hotel/resort/property is of prime importance so as to give the customers best possible experience for their continued patronage. The regular maintenance including the replacement of worn out furnishing his continuous requirement of the hotel industry. As noted by AO he assessee has also taken up dismantling of wall and also brick work. The above facts bring out the fact that the assessee has replaced the flooring in part of Hotel and made modifications to renovate the hotel to make it more appeasing to the customers. This resulted into the improvement of value of the building. and held the expenditure as capital in nature. It is also fact on record that no new addition of assets or facilities has come into existence in respect of the existing resort/hotel of the assessee. We note that the expenditure incurred by the assessee have been made to provide the same benefit as were available at the time of their initial installation. There have been no addition to the number of rooms of the resorts/hotel or any other space to generate the additional income from that place. Thus, respectfully following the decision of Goa Tourism Development Ltd. [ 2019 (3) TMI 287 - BOMBAY HIGH COURT] and Mac Charles (India) Ltd. [ 2015 (1) TMI 476 - KARNATAKA HIGH COURT] we hold that the expenses which have been treated as capital in nature by the Ld. CIT(A) are to be allowed as revenue expenditure. We also find force from the decision of Pandiyan Hotels Ltd [ 2020 (7) TMI 688 - MADRAS HIGH COURT] wherein similar issue was dealt holding it in favour of the assessee as revenue expenditure. Thus expenditure incurred by the assessee is revenue expenditure and not a capital expenditure and thus answered the substantial question of law in favour of assessee and against the revenue.
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2022 (12) TMI 381
Ex parte order of CIT-A - CIT(A) rejected the adjournment petition filed by the assessee and decided the matter ex-parte qua the assessee - assessee submits that the assessee had bonafide reasons for non-appearance on the scheduled date of hearing before the CIT(A) and the assessee had duly requested the learned CIT(A) for a short adjournment and given an opportunity the assessee will duly comply to the notices of hearing and ensure full cooperation for expeditious disposal of appeal on merits - HELD THAT:- Having heard the rival contentions and having perused the material on record, we are inclined to uphold the plea of the assessee and provide yet another opportunity of hearing to the assessee. We see no harm in providing one more opportunity of hearing to the assessee, and the assessee has assured us of his full cooperation. In case, however, the assessee does not fully co-operate in expeditious disposal of remanded proceedings, learned CIT(A) will be at liberty to take such action, apart from disposal of appeal based on material on record, as he deems fit and proper and judicious. The matter is thus restored to the file of the learned CIT(A) for adjudication de novo after affording yet another opportunity of hearing to the assessee, by way of a speaking order, and in accordance with the law. Ordered, accordingly.
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2022 (12) TMI 380
Addition of cash deposits and sundry creditors - Ex parte orders passed - non-compliance by the assessee to various notices issued to it by the lower authorities - assessee has chosen not to prosecute her case despite repeated opportunities given on several occasions - HELD THAT:- As the assessee has chosen to make this plea of restoring her matter to the lower authorities before us without even making any effort to substantiate the explanation offered. All documents filed before us in support of her case as mentioned above are only stated as being true-copies . Even the affidavit filed by the assessee before us, stating allegedly on oath the reason for non compliance to notices of authorities below, we find, is not original copy, but only mentioned as true copy . Such documents have no evidentiary value. It is the assessee who has sought redressal of her grievance against orders of the IT authorities by filing appeal before us. The assessee cannot sit back after filing the appeal seeking adjournment time and again and by simply filing written submissions to make a plea totally unsupported and unsubstantiated. It seems that the assessee has chosen to ignore the gravity of the situation despite being aware of it, which is evident by the fact that she has repeatedly filed appeal before the first appellate authority and also before us. Looking to the non-cooperative attitude of the assessee right from the very beginning i.e. the assessment proceedings, we are not inclined to show any liberty to such an assessee who does not appear to be interested to fight for her own cause. Since there is nothing before us dislodging the Ld.CIT(A) s order we uphold the order of the ld.CIT(A) confirming additions of both cash deposits and sundry creditors - Grounds of appeal of the assessee are rejected.
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2022 (12) TMI 379
TP Adjustment on account of profit attributable - international transaction - HELD THAT:- The issue stands decided in favour of the assessee by the decision of the co-ordinate Bench of the Tribunal in assessee's own case [ 2018 (8) TMI 1196 - ITAT HYDERABAD] to hold that there is no international transaction during the relevant financial year - we hold that there is no international transaction during the relevant AY and the addition made by the AO is accordingly deleted. No absence of any contrary material brought to our notice by the learned Departmental Representative we direct the AO to delete the addition made by him on account of Transfer Pricing Adjustment. Addition of corporate guarantee - why the corporate guarantee commission rate applied @ 1.6% is very fair and reasonable especially when the risks assumed by the assessee is much more? - HELD THAT:- DRP while deciding the issue has noted the following bench marking provision of corporate guarantee by assessee company to its AEs. So far as the various decisions relied on by the learned counsel for the assessee are concerned, these in our opinion are distinguishable and not applicable to the facts of the present case. In our opinion, every case depends on its own sets of facts and cannot be applied as a binding precedent in other cases. In view of the detailed reasoning given by the DRP/A.O., we uphold the order of the A.O./TPO/DRP on this issue. Accordingly, the grounds raised by the assessee on this issue are dismissed.
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2022 (12) TMI 378
TP Adjustment - rejecting the Internal Transactional Net Margin Method (TNMM) as Most Appropriate Method (MAM) - only reason for rejection of Internal TNMM by the ld. DRP is non-availability of date-wise analysis of comparison of AE transactions vis a vis non-AE transactions - main objections raised by the assessee before the ld. DRP was that Internal TNMM should be the most appropriate method in the instant case which was rejected by the ld. TPO - HELD THAT:- The date wise analysis for comparison of AE and non-AE transactions would be relevant only when CUP is adopted as MAM. They are certainly not relevant when TNMM is adopted as MAM. Moreover, with regard to the FAR analysis between AE and non-AE, we find that there is absolutely no difference with Functions performed or Assets employed. With regard to the Risks assumed, the ld. DRP itself admits that in respect of transactions with AE, the assessee is having very minimal and low risk. The turnover with non-AE is much greater than turnover with AE which is evident from the workings available - Hence, the entire FAR is also duly complied with by the assessee in the instant case. Even with lower risk that AE segment as accepted by the ld DRP is having, as evident from the segmental workings available we find that assessee had made higher margins with AE as compared to non-AE transactions. Hence, certainly, the assessee s international transaction with AE using Internal TNMM as the MAM is at arm s length, which has to be accepted in the instant case. We hold accordingly. Hence, the ground Nos. 2-6 raised by the assessee are allowed. Inclusion of five comparables chosen by the assessee by adopting external TNMM as the Most Appropriate Method - External TNMM method adopted by the ld. TPO - As going by the broad functional comparability we hold that even the five comparable companies which were rejected by the ld. DRP ought to be included in the final list of comparables. By this process, effectively all the 12 comparables chosen by the assessee, on without prejudice basis, for applying External TNMM gets approved. Hence, there is no scope for making any adjustment to arm s length price even if External TNMM is adopted in the instant case. Accordingly, the ld. TPO is hereby directed to delete the entire transfer pricing adjustment made in the instant case. Hence, the ground No. 7 8 raised by the assessee are also allowed. Deduction in respect of employee s contribution to provident fund and ESI - Contribution remitted beyond the due dates but before the due date of filing of the income tax returns u/s.139(1) - HELD THAT:- This issue is no longer res integra in view of the decision of CIT vs. Ghatge Patil Transport Ltd.[ 2014 (10) TMI 402 - BOMBAY HIGH COURT] wherein the employee s contribution to PF even if remitted before the due date of filing of return becomes an allowable deduction u/s.43B of the Act. Respectfully following the same, the ground No.9 raised by the assessee is allowed. Levy of interest u/s.234A - HELD THAT:- As the return of income has been filed on 28/11/2015 which is well before the due date prescribed u/s.139(1) in respect of transfer pricing cases. Hence, there is no delay at all. Accordingly, there cannot be any chargeability of interest u/s.234A. MAT credit u/s.115JAA - AO is hereby directed to grant MAT credit u/s.115JAA of the Act in accordance with law.
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2022 (12) TMI 377
TP Adjustment - Functional dissimilarity - comparability of the entity Thirdware Solutions Ltd. with that of the assessee company, which is purely in nature of software development service provider - HELD THAT:- In the absence of segmental results, a company which is engaged into dealing with software products as well as providing software services cannot be compared with a company which is engaged in software development services. Therefore, we direct the Assessing Officer/TPO to exclude this company, Thirdware Solutions Ltd. from the list of the comparables. Addition u/s 40(a)(ia) - payment made for purchase of license in respect of which claim of depreciation was made - tax was not deducted at source - HELD THAT:- We find the issue in the present ground of appeal is squarely covered in favour of the assessee by the decision of PCIT vs. Tally Solutions (P.) Ltd[ 2020 (12) TMI 1160 - KARNATAKA HIGH COURT ] wherein it was held that the provisions of section 40(a)(ia) are not applicable in the case of claim for allowance of depreciation, which is a statutory deduction available to the assessee. Thus we hold that the Assessing Officer is not justified in invoking the provisions of section 40(a)(ia) in respect of the payment made for purchase of software license in respect of which claim of depreciation was made. Accordingly, this ground of appeal no.2 stands allowed. Short credit for TDS - HELD THAT:- We restore this issue to the file of the Assessing Officer with direction to allow the credit for TDS made by MSEDCL on the interest income after due verification of Form 26AS and subject the provisions of section 199 of the Act. Thus, this ground of appeal no.3 stands allowed for statistical purposes.
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2022 (12) TMI 376
Exemption u/s 11 - investment of accumulated income - spending more than 85% of the receipts for charitable purposes - limitation of applying 85 % or less for the purpose of applicability of Section 11(5) - As submitted assessee has complied with the mandate of Section 11(1) by spending more than 85% of the receipts for charitable purposes so inspite of the deposits otherwise then modes specified u/s 11(5) of the Act or valid investments, the assessee will continue to get the benefit u/s 11 - appellant society is registered under section 12A vide registration and is engaged in organizing golf tournaments in India and abroad for the promotion of game of golf in India - HELD THAT:- The Bench is of considered opinion that the belief of assessee was erroneous that having spent 85% of the receipts for charitable purposes, the remaining could have been used in any manner whatsoever beyond the scope of Section 11(5) of the Act. Instead, the Bench is of view that Section 11(5) provides for investing or depositing money referred to in clause (b) of sub-section 2 of Section 11, in the identified investments falling in clause (i) to (xii) of Section 11(5) of the Act. The money referred in Clause (b) (ii) is one accumulated or set apart. Meaning thereby that even if 85% of the income referred in clause (a) or sub-clause (b) of sub section 1 of Section 11 read with the explanation 2 to that sub section (1) is applied to charitable or religious purposes then to claim exemption on the whole of the income, the accumulated or set apart income has to be deposited or invested in the investments identified in sub section (5) of section 11. Aforesaid view of the Bench is fortified by the following findings in M/s. Navajbhai Ratan Tata Trust [ 2022 (3) TMI 565 - ITAT MUMBAI] - Thus there is no error in the findings of Ld. AO or the Ld. CIT(A). The ground raised are not sustainable, the appeal is dismissed ex parte.
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2022 (12) TMI 375
Validity of re-assessment u/s.147 - addition made on account of in-genuine purchases - HELD THAT:- As entire legal procedure that were contemplated in the case of GKN Driveshafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT ] were duly complied with by th AO in the instant case. Hence for the aforesaid reasons, we hold that the ld. AO had validly assumed his jurisdiction for reopening the assessment u/s.147 - Accordingly, the ground No.2 raised by the assessee is hereby dismissed. Estimation of income for bogus purchases - Admittedly, we find that assessee had furnished the details of corresponding sales made out of purchases together with the stock registers and bank statements. Payments to M/s. Balaji Enterprises had been made by way of account payee cheques by the assessee. Since M/s. Balaji Enterprises was one of the concerns managed by Shri B A Desai whose bank accounts operation were found to be suspicious as detailed hereinabove, the lower authorities had doubted the veracity of transactions carried out by the assessee with M/s. Balaji Enterprises. Even though it has been recorded in the orders of the lower authorities that soon after the cheques are deposited in the bank account of M/s. Balaji Enterprises, the amounts were withdrawn in cash, there is absolutely no evidence brought on record by the lower authorities to prove that the said cash had been handed over to the assessee. There is no evidence brought on record to prove the cash trail with the purchases made by the assessee warranting making of disallowance of purchases. Assessee also had not discharged its onus beyond doubt in as much as the assessee was not able to explain as to why the notice u/s.133(6) of the Act could not be served on the addresses given by the assessee and he has also not bothered to produce any confirmation from M/s. Balaji Enterprises either during the course of assessment proceedings or during the course of appellate proceedings or even before us. We find that the primary suspicion based on the corroborative evidences gathered by DDIT Investigation Wing, Mumbai regarding the transactions of Shri B A Desai vis- -vis M/s. Balaji Enterprises still remains. Since assessee had carried out certain purchase transactions with such suspicious parties, the onus is more on the assessee to prove that it has debited genuine expenditure in its books. It is the case of the Revenue that assessee had debited purchases from M/s. Balaji Enterprises. It is not in dispute that the corresponding sales made out of purchases together with stock register has been produced by the assessee before the lower authorities. Hence, it would be just and fair to tax only the profit element embedded in the value of such purchases. Considering the industry in which assessee is engaged, we deem it fit and appropriate to estimate such profit element at 5% of the value of purchases, which in our considered opinion, would meet the ends of justice. Appeal of the assessee is partly allowed.
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Customs
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2022 (12) TMI 374
Recovery of customs duty foregone on the inputs allowed to be imported under 7 DFIA licences - correctness or otherwise of classification of Maize (corn) Starch declared by the appellant to customs for claiming export benefit under DFIA scheme - Notification No. 98/2009-Cus dated 11-9-2009 and 19/2015-Cus dated 01-04-2015 under section 28AAA of the Customs Act, 1962 - HELD THAT:- It can be seen from show cause notice and the impugned order that there is no dispute to the fact that the export item namely liquid glucose concentrate (food grade) was manufactured from using starch slurry which is essentially a starch albeit in slurry form. Starch is a necessary input for manufacture of liquid glucose is evident even from the technical material relied upon by learned AR appearing for the Revenue and from the extract of book titled Glucose Syrups, Technology and Applications of Peter Hull published by Wiley-Blackwell relied upon by the appellant. However, the case of the revenue is that since Starch is manufactured out of Maize which is the base input, correct SION for the export item-liquid glucose is Maize specified under SION Entry E76 and not Starch specified under SION Entry E22 and that appellant has mis-classified its product in order to claim undue benefit of DFIA Scheme. There is no dispute to the classification of export item in the present case. The dispute relates to import item-input. One of the specified import items under E22 is Starch whereas Maize is the specified import item under SION E76. Since undisputedly Starch slurry is used as immediate input by the appellant in manufacturing of its export item-liquid glucose concentrate, it cannot be said that starch was not appellant s input for export item. Further Starch is in turn manufactured from Maize is also an undisputed fact and equally qualify to be the input for the aforesaid export item under E76. It can be seen that subsequent to the exports by the appellant, SION Entry E22 was deleted by DGFT upon recommendation of internal committee on the premise that E22 was being mis-used by the exporters. This goes on to show that earlier exporters were eligible to claim any of the inputs under the respective entries as export item-liquid glucose essentially remained the same under both the entries. It can be seen that maize may be the original material used at the beginning of the manufacturing process but the input for manufacturing of liquid glucose concentrate was that one which was used directly for manufacturing export product. For export and also for exemption for goods manufactured in India a concept of immediate parentage is well recognized and accordingly the immediate parent material was relevant to decide which input was used for manufacture of the exported goods - In the present case, the immediate parent material was starch slurry i.e. starch and not maize and therefore case of the department that SION E76 was the correct norm cannot be sustained. Since the immediate parent material for manufacturing the exported goods was starch falling under SION E22 , it is clear that the Starch was the correctly applicable SION. Considering the ratio of the decisions of Tribunal in DHRUVCO PRINTERS (P) LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, NEW DELHI [ 1995 (5) TMI 176 - CEGAT, NEW DELHI] , COLLECTOR OF C. EX., BOMBAY VERSUS VIJAY FLEXIBLE CONTAINERS (P) LTD. [ 1996 (9) TMI 211 - CEGAT, NEW DELHI] and COMMISSIONER OF C. EX., MUMBAI-II VERSUS JAYNA PACKAGING PRIVATE LTD. [ 2000 (8) TMI 136 - CEGAT, MUMBAI] , denying the benefit under DFIA on the ground that Starch is not the original input and that Maize is the original input which alone is eligible for the benefit of DFIA is bereft of any legal basis. Jurisdiction of customs to demand duty from the appellant invoking section 28AAA of the Act - HELD THAT:- It is undisputed fact that all the 7 DFIA licences were granted by the DGFT are valid and subsisting and further no proceedings for cancellation or suspension of any of these authorizations have been initiated by the DGFT. It thus follows that DGFT which is the proper authority to determine classification of goods under DFIA claim has not disputed and has accepted the classification of import item under E22 of SION. Further, considering the above analysis, appellant has correctly classified its product under SION E22. In the circumstances, finding of the commissioner that appellant resorted to mis-declaration and suppressed facts cannot be sustained. It has been further held in the said decision of AXIOM CORDAGES LTD. VERSUS COMMISSIONER OF CUSTOMS, NHAVA SHEVA-II [ 2020 (9) TMI 478 - CESTAT MUMBAI] that when the assessment of shipping bills filed by the appellant has attained finality as department has not filed appeal against the same under section 128 of the Act; classification of goods cannot be questioned subsequently by the customs by way of issuance of show cause notice. The impugned order cannot be sustained and is liable to be set aside - Appeal allowed.
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Insolvency & Bankruptcy
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2022 (12) TMI 373
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- As per the provisions of law the Financial Creditor has to furnish the details of the default. The Appellant / Applicant has failed to establish that the Corporate Debtor owed an amount to the Appellant and it defaulted. Further, the Appellant failed to establish the debt and default except in Part-IV of Form-I stating the total amount of debt granted Rs.4,62,92,880/- and there is no evidence with regard to disbursal of amount from the account of the Appellant against the consideration for the time value of money. The outgoing parties confirmed the terms of MoU dated 22.06.2017 and also confirmed the consideration as final settled amounts towards their shareholding and other liabilities - the Appellant contend that it issued a demand letter dated 25.06.2018 and 18.07.2018 addressed to the present Directors claiming balance of amount Rs.4,62,92,880/-. In the very same letter, the Proprietor of the Appellant admitted the receipt of amount Rs.32 lacs on 16.04.2018. In response to the letter dated 25.06.2018, the Corporate Debtor vide its reply dated 14.07.2018 addressed to the Proprietor of the Appellant stating that the balance amount claimed by it do not contain any account ledger substantiating the balance outstanding and requested to provide the year wise ledger of last 5 years of both the accounts i.e. the Appellant and the Proprietor (Mr. Ravinder Singh). The Appellant has not produced any reply or response to the letter dated 14.07.2018 nor produced any documentary evidence to establish the debt owed by the Corporate Debtor. The Appellant failed to establish with documentary evidence that there is a debt and default. The Adjudicating Authority passed a reasoned order and no interference is called for. Appeal dismissed.
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2022 (12) TMI 372
Maintainability of petition - Appellant does not satisfy the basic requirements of the provision of Companies Act as the Respondents are not a company as on the date of filing of the present petition - Section 421 of the Companies Act, 2013 - HELD THAT:- The Company Petition filed on 13.07.2018 by the Appellant before the Tribunal after delay of 4 years - Further, it is observed that the Appellant lodged FIR No.0259 dated 03.09.2016 regarding forgery, which has already been registered and presently charge sheet has been filed in the above FIR and the same is pending before the Court of Ms. Neha Pandey, MM-03, Tis Hazari Court (West), Delhi. It is also observed that the Respondent No. 6 the erstwhile company i.e. Bhero Baba Infosolutions Pvt. Ltd. has been converted into (Respondent No. 7) LLP i.e. Bhero Baba Info Solutions LLP way back in 05.01.2016 more than two and half years before filing of Company Petition. Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the National Company Law Tribunal (New Delhi Court III), forthwith.
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2022 (12) TMI 371
Settlement Agreement has entered between the parties - application filed by Operational Creditor and Suspended Director of the Corporate Debtor for disposal of this Appeal in terms of the settlement agreement - HELD THAT:- Agreement is taken on record. The amount deposited by the Appellant under the order dated 01.12.2022 be refunded to the Appellant. In view of the order passed today, the Respondent No.1 need not deposit the amount of Rs. 2.5 Crores as directed on 01.12.2022 - Appeal disposed off.
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2022 (12) TMI 370
Taking possession of the demise premises in view of Section 14(1)(d) of I B Code - HELD THAT:- Section 14(1)(d) provides that the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor is prohibited. In support of this submission, Counsel for the Appellant has relied upon a decision of the Hon ble Supreme Court rendered in the case of RAJENDRA K. BHUTTA VERSUS MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY AND ANOTHER [ 2020 (3) TMI 34 - SUPREME COURT ], in which the question was about the correct interpretation of Section 14(1)(d) of the Code. In the case of Rajendra K. Bhutta, the application under Section 7 was admitted on 24.07.2017 and notice of termination was issued on 12.01.2018. The Appellant wherein filed an application before the NCLT to restrain MHADA from taking over possession till completion of the CIRP, on the ground that recovery of possession shall be in derogation of the moratorium imposed under Section 14 of the Code but the said application was dismissed. Further, NCLAT also dismissed the appeal holding that it cannot be treated to be the asset of the Corporate Debtor for the application of provisions of Section 14(1)(d) of the Code. The Hon ble Supreme Court, however, allowed the appeal. We have carefully gone through the aforesaid decision which is in fact not applicable to the facts of this case because in the reported case the termination notice was issued by MHADA after the CIRP whereas in the present case the lease deed was terminated way back on 01.12.2015, constructive possession was taken, the Corporate Debtor was admitted into CIRP and moratorium was imposed on 26.04.2019. It has also been observed by the Tribunal that the Corporate Debtor had lost possessory rights more than three years prior to the initiation of the CIRP. The property of third party, occupied by the Corporate Debtor had been expressly excluded from the purview of term asset. Since the demised premises ceased to be the property of the Corporate Debtor much prior to the initiation of CIRP, therefore, it cannot be covered under Section 14 much less 14(1)(d) of the Code. Appeal dismissed.
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2022 (12) TMI 369
Seeking liquidation of the Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The ratio in the case of MR. SHARAD SANGHI AND ASHUTOSH KOUL AND 814 OTHER EMPLOYEES OF JYOTI STRUCTURES LIMITED VERSUS MS. VANDANA GARG AND ORS. AND DBS BANK LIMITED AND ORS. [ 2019 (5) TMI 387 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL] is not applicable to the facts and circumstances of the present case because there is a change in the voting share in the present case that takes place after the order of liquidation. It is also pertinent to mention that it has been time and again held by the Hon ble Apex Court that the Code is complete in itself and since there is no provision to deal with such a situation as we have one in hand, we do not find it to be a fit case to apply Rule 11 of the NCLAT Rules 2016 which operate in altogether different sphere. Looking from any angle, we could not persuade ourselves to accept the contention raised by the Appellants in the present three appeals for setting aside the impugned order and to set the clock back on the asking of the Appellant (City Co-Operative Credit And Capital Limited) - Appeal dismissed.
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2022 (12) TMI 368
Liability to pay the dues to the Corporate Debtor - outstanding dues of inter-company transfer - Corporate Debtor in liquidation - time limitation - amount due and payable - tri-partite agreement - whether the claim filed by Liquidator under sub-Section (5) of Section 60 of the Code is governed by Article 137 of the Limitation Act, 1963 and if the claim is enforceable by law as on the date of the Liquidation Order, or is it barred by Limitation? - Whether the amount is due and payable as it is the case of the Appellant that the dues were settled by way of inter-company transfers pursuant to a Tripartite Agreement entered into between the Corporate Debtor, its Sister Concern and the Appellant? - HELD THAT:- Section 60(6) of the Code is similar to Section 458A of the Parent Company Act, 1956, which deals with exclusion of certain Limitation period. Likewise, Section 60(6) of the Code says that notwithstanding anything contained in the Limitation Act, 1963 or in any other law for the time being in force in computing the period of Limitation specifies for any Suit or Application by or against a Corporate Debtor, for which an Order of Moratorium has been made under this part the period during which Moratorium is in place shall be excluded. If the claim is legally enforceable, the period of Limitation will run from the date of commencement of CIRP till the date on which the winding-up Order is made i.e., Moratorium under Section 14 of the Code - In the instant case, the last invoices for the supply of good by the Corporate Debtor is dated 16.06.2015 and it is the case of the Appellant that the Recovery Proceedings, if any, ought to have been initiated within three years i.e., on or before 16.06.2018. In this case, the Moratorium was in effect from 02.01.2018 to 12.10.2018 and this period shall be excluded in computing the period of Limitation specified for any Suit or Application by or against the Corporate Debtor in accordance with the provisions of sub-Section (6) of Section 60 of the Code. The period of Limitation of three years would therefore be either from the date of the CIRP or Liquidation Order since the Resolution Professional or Liquidator can act on behalf of the Corporate Debtor only after their appointment and if the impugned Claim is legally enforceable as on the date of the CIRP as well as on the date of Liquidation, by exclusion of Limitation as provided for under Section 60(6) of the Code, it cannot be said that the Claim is barred by Limitation. It is the case of the Appellant that the 8 months delay was because they were undergoing SARFAESI Proceedings and could not find the documents. When the amount payable is to a tune of Rs.24,36,00,048/-, it is not understood as to how even a copy of the Tripartite Agreement was not traceable/could not be placed for 8 long months. The communication relied upon by the Appellant is dated 08.01.2016 and does not give any details with respect to the authorised signatory, nor any acceptance by the Corporate Debtor for this request of transfer. The Learned Counsel for the Respondent vehemently denies that such an Agreement was ever entered into. As regarding the CBI enquiry and the other issues raised by the Appellant are not being adjudicated in this Appeal as they are not within our domain regard being had to the facts of the matter on hand. The only question which needs to be addressed to, is whether the Adjudicating Authority was justified in allowing a Liquidator to claim the amount due and payable to the Corporate Debtor. In the absence of any concrete evidence on record that the amounts were indeed transferred to the Sister Concern, nor any acceptance letter by the Corporate Debtor, agreeing to such transfer, and also having regard to the fact that there is no denial by the Appellant herein with respect to the actual transactions, having been executed, we do not see any illegality or infirmity in the Impugned Order. Appeal dismissed.
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2022 (12) TMI 367
Seeking transmission of shares in the Appellant s name - existence of valid Succession Certificate at the time of filing of the Company Petition or not - whether the NCLT was justified in directing the executor to issue Notice to the Rival Claimant namely Smt. K. Sumathi and in granting six weeks time to obtain the necessary clarification regarding the Succession Certificate, keeping in view the facts and circumstances of the attendant case on hand? HELD THAT:- A perusal of the material on record shows that the Respondent Company had received various letters of communication from both Smt. K. Sumathi and Ms. Nalini Hari in respect of the shares held by late Mr. R. Kapanipathi Rao. It is the main case of the Appellant that the NCLT has erroneously given time for Smt. K. Sumathi to obtain clarification regarding the Succession Certificate issued by the Hon ble Madras High Court on 25.08.2019, as essentially the date on which NCLT has decided the matter, the Succession Certificate of the Appellant was subsisting which evidence that the Appellant alone is the legal heir and therefore the shares had to be transmitted only to the heir as shown in the Succession Certificate as on the date of the Impugned Order. Instead NCLT had given Notice to the Rival Claimant Smt. K. Sumathi only because there was a collusion between the said Smt. K. Sumathi and the Respondent Company. Having regard to the Order in K. SUMATHI, S. UMAMAHESWARI VERSUS NALINI HARI, UMAMANI VIJAY SWAMI RAO, R.K. SHANKAR, R.K. CHANDRASHEKAR [ 2022 (3) TMI 1450 - MADRAS HIGH COURT] , whereby the Hon ble Madras High Court has condoned the delay and the Order issuing Succession Certificate dated 28.05.2019, is under challenge, we are of the considered view that the decision regarding transmission of shares by the Respondent Company and the Rival Claims ought to be decided subject to the Order of the Hon ble Madras High Court. This Tribunal does not find the Judgements relied upon by the Appellant, applicable to the facts of the attendant case - appeal dismissed.
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Central Excise
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2022 (12) TMI 366
Levy of penalty Rule 26 of Central Excise Act, 2002 - charge of abatement in the offence of fraudulent availment of cenvat credit - HELD THAT:- The penalties on the present appellants were imposed under Rule 26 of the Central Excise Rules, 2002 for the different role for the charge of abating the fraudulent availment of cenvat credit by Shree Ram Tubes Pvt Ltd. M/s. Shree Ram Tubes Pvt Ltd and many other notices have got their case settle under SVLDRS. Therefore, the main case of M/s. Shree Ram Tubes Pvt Ltd could not be decided on merit as the appeal was dismissed as withdrawn. In the present appeals as regard the appellant Shri Bablubhai Abdulbhai Khan it was found that this appellant is the Proprietor of M/s. Palghar Golden Roadlines with effect from March 2007 before that his father Late Shri Matiullah was the Proprietor of M/s. Palghar Golden Road Lines. However, the appellant was authorized for all the activities on behalf of Palghar Golden Road Lines and his statement dated 30.08.2007 was recorded wherein he has admitted regarding issuance of blanks LRs. Therefore, he was directly involved in the overall offence of facilitating wrong availment of credit to M/s. Shree Ram Tubes Pvt Ltd. For imposition of penalty under Rule 26 the status of the person is not relevant whereas if any person is involved in any capacity for evading of duty or wrong availment of cenvat credit his offence is punishable under Rule 26 of Central Excise Rules, 2002 - merely because he was not the proprietor of Palghar Golden Roadlines at the relevant time but he was otherwise actively involved in the modus operandi of wrong availment of Cenvat credit by M/s Shree ram Tubes Pvt Ltd. All the appellant having direct and active role in entire modus operandi of wrong availment of cenvat credit by M/s. Shree Ram Tubes Pvt Ltd, particularly when M/s. Shree Ram Tubes Pvt Ltd has admitted the liability of wrongly availed cenvat credit. Therefore, the penalties imposed on the appellant is correct hence, the same is upheld. Appeal dismissed.
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2022 (12) TMI 365
Levy of interest and penalty - Reversal of CENVAT Credit (without utilization) on being pointed out, before issuance of SCN - malafide intent or not - extended period of limitation - HELD THAT:- There is no dispute that the appellant have wrongly availed the cenvat credit and subsequently reversed. The provision for interest is made under Rule 14 of the Cenvat Credit Rules, 2004 - From the plain reading of rule 14 of CCR, it is clear that the interest is chargeable in event of either wrongly availed credit or wrongly utilized. Therefore, even though the credit was not utilized but since the credit was wrongly availed the interest is unavoidably chargeable. Following the Supreme Court judgment in the case of UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. [ 2011 (2) TMI 6 - SUPREME COURT] , the interest is chargeable. Hence, the demand of interest is upheld. Extended period of limitation - Penalty under section 11 AC which is equal to the amount of cenvat credit availed - HELD THAT:- The show cause notice has invoked the extended period, the ingredients for invoking extended period for demand as well as for imposition of penalty under section 11 AC are same. The demand being under extended period the penalty is inevitable, once demand is sustainable for extended period, the penalty under section 11 AC is imposed as mandatory - There is no dispute that the appellant have availed the cenvat credit during January 2005 to march 2007 and it is on pointed out by the department the same was reversed on 20.07.2007. The wrong availment of credit was suppressed from the department as the department was not aware that the credit taken by the appellant was pertaining to their other unit. In this circumstance the extended period was rightly invoked. Therefore, the demand for the extended period as well as equal penalty is sustainable. Appeal is dismissed.
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2022 (12) TMI 364
Interest on the amount of refund sanctioned - deposit made during the investigations is merely a deposit of the duty under section 11B of Central Excise Act, 1944 (CEA), or not - applicability of Section 11BB of CEA - HELD THAT:- Hon ble Apex Court has settled this issue in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [ 2006 (1) TMI 55 - SUPREME COURT] holding the assessee entitled for interest on the refund of the amount which he was not liable to pay to the Department from that date of the deposit itself. Section 11B of CEA is not applicable to such revenue deposits. It is further observed, as has been brought to notice, that Department since the time of issue of show cause notice have been acknowledging that amount in question is neither the amount of duty nor the amount of pre-deposit, the said acknowledgement is sufficient when read in the light of above discussed law to hold that the appellant was definitely entitled for interest on the amount of Rs.10,00,000/- but not in accordance with section 11B/11BB of Central Excise Act, 1944. Accordingly, it is held that Commissioner (Appeals) has wrongly involved the said provision while restricting the entitlement of appellant for claim of interest. The appellant is entitled for the interest @ 12% per annum from the date it was deposited i.e. with effect from 31.08.2009/ date of clearance of cheque for the said amount of Rs 10 lakh. Issue No. (1) as framed above accordingly is decided in favour of the appellant. Whether the Appellant is entitled for interest on the amount of interest if sanctioned as compensation to be paid by the Department for causing unnecessary monetary loss and harassment to the Appellant? - HELD THAT:- The amount in question was not a duty deposit but was the Revenue deposit, the Government has retained the said amount over long years, as such appellant is held entitled for interest as compensation on the amount of interest already awarded under issue No. (1) however, @6% from the date of impugned Order-in-Appeal till its disbursement. Appeal allowed - decided in favor of appellant.
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Indian Laws
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2022 (12) TMI 363
Consumer Protection - Seeking hand over possession of the residential duplex flat to the Complainant - Complainant was promised by a settlement agreement a residential duplex flat in a real estate project labelled as Rajmahal Royal Residency Project, for his personal use - Section 21(a)(1) of the Consumer Protection Act, 1986 - HELD THAT:- Admittedly, the Complainant invested the amount in the project as a partner. Subsequently the Complainant withdrew as a partner and requested Opposite Party No.2 for refund of his investment amount with interest. As Opposite Parties failed to refund the amount, the Complainant entered into an agreement dated 21.11.2006 wherein he was promised that he would be given a duplex flat in the project against his money invested in the project. As the project got delayed, the Complainant sought refund of the amount invested by him. The Complainant made investment of his money as a partner in the project and now he is seeking refund of that investment amount. The entire transaction between the Complainant and the Opposite Parties is commercial in nature. Refund of the amount sought by the Complainant is only extension of initial investment made by him, which is purely commercial in nature - By the Complainant s own admission, vide settlement dated 21.11.2016 the said amount was agreed to be accounted against the contractual promise for delivery to the Complainant of a duplex flat. The amount paid alongwith accrued interest was the consideration for the flat and the debt was discharged by the Opposite Parties through the promise to deliver the duplex flat to the Complainant. Entering into agreement for a duplex flat is only a sequence for realizing the invested amount with interest. Claim made by the Complainant is only for furtherance of gain for the original investment made. The Complainant being an investor is not a Consumer under the provisions of Consumer Protection Act, 1986. The Consumer Complaint is accordingly dismissed as not maintainable with liberty to the Complainant to approach the appropriate Forum.
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